According to the formal charge against the founder of Terraform Labs, the company behind the collapsed Terra (LUNA) ecosystem, the United States Securities and Exchange Commission (SEC) alleges that Do Kwon has tapped into some of his massive reserve of Bitcoin (BTC).
In addition to accusing him of misleading investors, the U.S. regulator has also stated that Do Kwon had transferred over 10,000 Bitcoin out of the failed blockchain project and turned some of it into cash via a Swiss bank, as per a report by Bloomberg published on February 17.
SEC’s allegations
The complaint states that the SEC is charging Kwon and Terraform Labs of fraud related to the cryptocurrencies created by them, which led to investor losses of at least $40 billion, as well as storing more than 10,000 BTC in a cold crypto wallet away from any crypto exchange.
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Furthermore, the agency said that the defendants have been transferring (and continue to transfer) these assets from the wallet “on a periodic basis since May 2022,” sending them to an undisclosed financial institution based in Switzerland and converting them into cash.
“Between June 2022 and the date of this complaint, over $100 million in fiat currency has been withdrawn from that Swiss bank,” the SEC specified.
Do Kwon at large as LUNC suffers
Despite his denial, Do Kwon remains on the run after South Korea issued an arrest warrant after him and his placement on an Interpol red notice, with the most recent information pinning his possible hideout in Serbia, which has led South Korean officials to visit the European country in an effort to find him.
Meanwhile, the news of the U.S. financial watchdog formally charging Do Kwon has pushed the market capitalization of Terra Classic (LUNC), the rebranded native cryptocurrency of the old Terra network, below the $1 billion level, representing a loss of over $50 million in a single day, as Finbold reported.
